All Forum Posts by: Carl Millsap

@Cody Godfrey I'm not sure. I think it can be if the owner provides you an end of year interest statement i.e. same thing a bank would provide. 

@Cody Godfrey There are a couple things you can do:

1. Owner financing. Negotiate your purchase price, interest rate, amortization schedule 15, 20, 30 years, and payment. Say $75k at 5.5% amortized over 30 years but has a 5 year or 10 year balloon. Payment would be $425 a month. 

Owner makes the payment to his bank and keeps the difference between your payment and what they pay, plus at the end of the 5 year or 10 years their net sales price will be higher because of the interest they collected over the years. You would be responsible for everything as if you had it mortgaged with a bank ie. insurance, maintenance, tenant management etc.

2. Subject to: Give the owner 5-10% down and take over their payments. Set-up a plan to pay them off in 2-3 years once renovations are complete and you can finance it at the ARV.

@Travis Evenson time to get creative:

1. Find a local bank (portfolio lender), develop a relationship with them. Some will factor your rents into your income and may even do an asset based eval...essentially if the rents will cover expenses etc. they'll lend on it. 

2. Find owners who are willing to do owner financing. Get a solid contract that protects the owner and you. Use a title company for the transaction so you don't get surprised by liens etc. 

3. Raise $ from private investors.

These are just a few options to grow your portfolio. 

@Nick Cooper County clerk records & Property Valuation Assessment (PVA) office should have the new owner's name and address. 

If it's a business entity you can trace it back to via the Secretary of State office / records (at least in my state). 

@Web A. If the numbers work, then I'd buy the deal or do as some have already suggested...i.e. get the owner to lower the purchase price based on current income, or follow the current lease to the letter. 

As soon as a tenant pays late or violates the lease serve them notice of eviction etc. or have them sign a new lease. 

I wouldn't tank the deal if the numbers work at the current rent levels. I would also get the inspection as someone suggested. Some owners have low rents because they're ok with the income, have lower expenses or just haven't updated the units to command a higher rate. 

@Nick Cooper don't give up on it if you think it's worth the investment. Let the buyer do the rehab then offer to buy it from them if the numbers work for you. 

I'm going to close on a building that I had under contract but walked away from because of another rehab I was doing. 

Someone else bought it, and is now selling it to me 4 months later. They put a new roof on the building, collected rents, and will make a few $s for their time. The numbers work for me at the slightly higher purchase price, but I don't have to put a roof on it. 

@Web A. I would check on the local laws. In some places i.e. Kentucky you have to honor the current lease. 

I would ask the current owner for a copy of each lease, the credit reports and background checks they ran / used to qualify the tenants just so you know.

@Nick Cooper I'm not sure. I would get 3 contractors over to look at it and get a bid from each. This will give you an average cost. 

@Adnan Dizdarevic I'd drive around and look for properties that are distressed but aren't listed yet. Find the owner's info and send a letter to see if they'd like to sell. Pull property tax records for  the city and county, send anyone with delinquent taxes a letter offering to buy the property. Just a couple places to start. 

@Adnan Dizdarevic depending on the market and even the asset class it could really competitive. 

Have you looked outside your market? 

Are you only looking at properties listed for sale?